Total signs agreement on $13bn Papau New Guinea LNG project

Total has reached an agreement with the government of Papau New Guinea allowing work to begin on a $13bn (£9.9bn) project to roughly double the country’s energy exports.

The project will aim to roughly double the Pacific island nation’s exports of liquefied natural gas (LNG) to 16million tonnes per year.

The agreement between Total, and its partners ExxonMobil and Oil Search, with the State means front-end engineering design (FEED) work can begin.

Two onshore gas fields – Elk and Antelope – will be developed to feed two new production units to be built at the PNG LNG plant currently run by ExxonMobil.

Total said the project will have a capacity of 5.4million tonnes per year, unlocking more than one billion barrels of oil equivalent.

A final investment decision is targeted for 2020, with production starting in 2024.

Analysts estimate the expansion will cost around $13bn.

Under the deal, the state of Papau New Guinea receives a 22.5% stake in the project.

Total CEO Patrick Pouyanne said: “The finalization of the Gas Agreement is a major milestone for Papua LNG project that confirms the commitment of all partners and the Government of Papua New Guinea to make the project a success for all stakeholders.

“We are very pleased with the progress of this competitive LNG project that benefits from the brownfield synergies with existing liquefaction facilities and the proximity to Asian markets.

“It will further strengthen our position in the Pacific basin and ensure our future LNG portfolio growth.”